Letter of Transmittal 15st February, 2003 Sam Dunnett Arrow Printing & Publishing Burk’s Falls, Northern Ontario Subject: Report consisting of a suggested plan of action for Arrow Printing and Publishing Dear Mr. Dunnett, Enclosed you will find our recommendation report on a befitting future plan of action that Arrow should follow. We believe that expanding into four color specialty domain will be a very fruitful step for Arrow. We also recommend you to get into a partnership to acquire efficient salesperson/s and to secure government funding (if possible) to help Arrow in this expansion. If you have any questions about this submission or if additional information is necessary, you may contact the undersigned. Thank you in advance for your …show more content…
The business of Arrow is primarily run by Mr. Dunnett and his son Peter, while his wife Maria manages bookkeeping on a monthly basis. Arrow has so far established itself as a prominent Printing and publishing house in Burk’s Falls region. It has primarily loyal customer base, strong relations with suppliers, does not advertise heavily, does not face high competition in its target market and has remained profitable over the years. But, after almost 45 years in the printing industry, Mr. Dunnett is not finding the usual business of Arrow challenging enough. He also wishes to pursue his other fields of fields of interest, like politics, as he is also currently serving as the Mayor of Township of Magnetawan. Now, Mr. Dunnett is confused as whether to sell the business, continue with it or to expand it into potentially lucrative markets. Problem Statement The problem in this case is about the personal decision of keeping or selling Arrow Printing and Publishing, which Sam Dunnett must make while taking into consideration, the future of Arrow. Available Options Sell the business to his son Peter Seek an external buyer with excess capacity who is looking for expansion and sell the business to him/her Expand the business to underserved lucrative markets with the help of partnership with companies in that domain by getting …show more content…
Dunnett a lesser amount than the net profits, assuming around $33000. 3. If the business is expanded with the help of partnership Penetrating into the underserved market of four-color speciality web work will lead to increased market share, higher margins, a significantly higher annual growth rate as compared to Arrow’s present level and thus will result in improvement in Arrow’s reputation. But, it also requires dilution of ownership of Mr. Dunnett to almost half. This expansion will require increased involvement of Mr. Dunnett in the business. But, the challenging work environment and higher financial gains will keep him satisfied. Financial Analysis (for 2003)- Cost of equipment and upgrades- $500,000 Repayable loan amount- $125,000 Non-repayable amount-$375,000